CA, Inc. et al v. Netflix, Inc.

Filing 270

ORDER Granting Plaintiff's Motion to Stay Pending Inter Partes Review (Docket No. 51 in C-21-3649). Status Report due by 1/31/2023. Status Conference set for 2/7/2023 02:30 PM before Judge Edward M. Chen. Signed by Judge Edward M. Chen on 3/30/2022. (emcsec, COURT STAFF) (Filed on 3/30/2022)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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NETFLIX, INC.,
Plaintiff,

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v.

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CA, INC., et al.,
Defendants.

United States District Court
Northern District of California

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CA INC, et al.,

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Plaintiffs,

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Case No. 21-cv-03649-EMC
ORDER GRANTING PLAINTIFF’S
MOTION TO STAY PENDING INTER
PARTES REVIEW
Docket No. 51
RELATED TO
Case No. 22-cv-00373-EMC

v.
NETFLIX INC,

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Defendant.

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Currently pending before the Court is Netflix’s motion to stay proceedings in two related

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cases. The higher-numbered case is the patent infringement case filed by CA/Avago; the lower-

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numbered case the declaratory judgment case filed by Netflix. Although the patent infringement

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case is the higher-numbered case, it was filed before the declaratory judgment case. In the

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pending motion, Netflix asks the Court to stay proceedings in both cases pending inter partes

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review (“IPR”). The PTAB has instituted IPR for four out of the five patents at issue. A decision

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on those patents is expected by February 2023. For the fifth patent, Netflix filed for IPR in

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January 2022 and a decision on whether IPR will be instituted is expected in approximately six

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months.

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Having considered the parties’ briefs and accompanying submissions, the Court hereby
finds the matter suitable for disposition without oral argument. The hearing on Netflix’s motion to

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stay is VACATED, and the motion GRANTED.
There is no dispute that “[c]ourts traditionally consider three main factors in determining

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whether to stay a case pending the conclusion of IPR proceedings: ‘(1) whether discovery is

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complete and whether a trial date has been set; (2) whether a stay will simplify the issues in

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question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear

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tactical disadvantage to the non-moving party.’” Trusted Knight Corp. v. Int'l Bus. Machines

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Corp., No. 19-CV-01206-EMC, 2020 WL 5107611, at *1 (N.D. Cal. Aug. 31, 2020). On balance,

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these factors weigh in favor of a stay in the instant case.
For example, on (1), the Court acknowledges that there has been a fair amount of

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discovery conducted in this case and that, before the patent infringement case was transferred to

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United States District Court
Northern District of California

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this Court in January 2022, trial had been set for April 2022 in Texas. However, the Court views

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the trial date set by the Texas court as somewhat unusual – i.e., the patent infringement case was

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only filed back in March 2021; thus, the Texas court put the case on a fast track for the trial to take

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place by April 2022. Furthermore, as a practical matter, the patent infringement case is now

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before this Court, and there is a significant amount of litigation that still remains, including more

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discovery and claim construction (because Netflix has objected to the Texas magistrate judge’s

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claim construction ruling). This Court has yet to set a new trial date.

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On (2), a stay is likely to simplify matters in this case. IPR has been instituted for four out

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of the five patents, and the remaining patent (for which Netflix has filed for IPR) appears to be

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related to at least one of the other four patents. See Mot. at 5 (noting that CA/Avago “disclosed a

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single technical expert to address both the ‘938 and ‘419 patents”). That some or even all claims

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may survive IPR and/or that IPR will not address all invalidity issues does not negate efficiencies

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from a stay. See Trusted Knight, 2020 WL 5107611, at *3 (noting that, “even if the IPR

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proceedings do ;not result in any cancelled or modified claims, this [C]ourt will receive the benefit

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of the PTO's expertise and guidance on these claims’[;] [i]n addition, the case will be simplified

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because IBM would be barred from raising any arguments it raised or could have raised in the

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PTO proceeding”).

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Finally, on (3), i.e., the Court is not persuaded that a stay would unduly prejudice or
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tactically disadvantage CA/Avago. See id. (stating that courts assess four subfactors here: “(1) the

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timing of the petition for review; (2) the timing of the request for the stay; (3) the status of review

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proceedings; and (4) the relationship of the parties”) (internal quotation marks omitted)). Netflix

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filed for IPR within a few months after the patent infringement case was filed (and understandably

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after CA/Avago had provided their infringement contentions). In addition, it was reasonable for

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Netflix to wait until after IPR had been instituted (in February 2022) before moving this Court for

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a stay (in March 2022). Staying the case pending the PTAB’s IPR decision for four out of the five

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patents could result in a stay of proceedings through February 2023. However, given that the

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patent case was initiated in March 2021, that delay is not unduly burdensome. Moreover,
“‘[c]ourts have repeatedly found no undue prejudice unless the patentee makes a specific showing

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United States District Court
Northern District of California

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of prejudice beyond the delay necessarily inherent in any stay,’ and thus, the ‘delay inherent in the

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reexamination process does not constitute, by itself, undue prejudice.’” Id. at *5. Finally,

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CA/Avago admit that they are not competitors with Netflix, and they do not dispute Netflix’s

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assertion that they “have abandoned any claim for injunctive relief or lost profits” and that “they

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have no practicing products.” Mot. at 16.

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For the foregoing reasons, the Court grants Netflix’s motion to stay. As a placeholder, the

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Court sets a status conference for February 7, 2023. If the PTAB issues its IPR decision on the

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four patents earlier than this date, then the parties may move the Court to advance the status

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conference date. The parties shall file a joint status conference statement within one week prior to

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the conference.

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This order disposes of Docket No. 51 in No. C-21-3649 EMC.

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IT IS SO ORDERED.

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Dated: March 30, 2022

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______________________________________
EDWARD M. CHEN
United States District Judge
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